FTA understanding with EU before graduation: Muktadir

Commerce Minister Khandaker Abdul Muktadir has said that negotiations on a Free Trade Agreement with the European Union will begin soon, adding that it will be possible to reach an understanding on signing an FTA with the EU, Bangladesh's largest export destination, before it graduates from Least Developed Country (LDC) status.

"If that is not possible, there will be an initiative to maintain current market benefits through a preferential trade agreement," he said at a seminar titled "Trade Expansion and Investment Potential in Bangladesh," organised by the Bangladesh Consulate General in Hong Kong yesterday, said a commerce ministry press release.

Highlighting Bangladesh's high logistics costs as a major challenge to the investment climate, Muktadir said the cost of the country's supply chain system stands at around 16% of GDP, compared to a global average of roughly 10%, the minister pointed out.

He said this gap needs to be narrowed by reducing transport, production, and import-export costs. He also stressed ensuring policy stability, lowering logistics costs, automating the customs system, and simplifying the business start-up process to improve the investment climate.

The minister said trade agreements are being pursued with various countries to help Bangladesh retain its trade benefits after graduating from the LDC list in 2029. Economic partnership agreements have already been signed with Japan and South Korea, while free trade agreement negotiations are ongoing with around 13 other countries.

He also discussed plans to expand Chattogram Port's capacity by bringing in international operators and to build the Matarbari deep-sea port, expressing hope that these infrastructure projects would lower cargo transport and port management costs.

On simplifying the business start-up process, he said that currently it takes up to several hundred days for a business to reach the stage of opening a letter of credit. The entire process is being digitised, he said, which will allow new businesses to reach the letter-of-credit stage within a maximum of 14 days in the future.

The minister said initiatives are also underway to digitise various business processes, including trade licenses and share transfers, which will significantly reduce the need for entrepreneurs to visit government offices in person.

Regarding customs reforms, he said automation will reduce the time and cost of cargo clearance for importers. There are plans to introduce a risk-based customs management system that reduces unnecessary physical inspections for established and reliable businesses. He assured that unnecessary customs restrictions and procedures would be significantly eased within the next six months to a year.

He also pointed to ship recycling as a promising sector for new investment in Bangladesh, noting that around 90% of the world's ship recycling is carried out by Bangladesh and India and that there is scope for further investment in this sector in the country's coastal areas.

Meanwhile, the commerce minister said a trade delegation would soon be sent to Sri Lanka to assess the potential for exporting Bangladeshi potatoes to that market, while opportunities for onion exports would also be explored.

The issues were discussed at a bilateral meeting between Bangladesh Commerce, Industry and Textiles and Jute Minister Khandkar Abdul Muktadir and Sri Lankan Minister of Trade, Commerce, Food Security, and Cooperative Development Wasantha Samarasinghe on the sideline at the 11th Belt and Road Summit 2026 in Hong Kong yesterday.

At the meeting, Minister Samarasinghe expressed interest in importing potatoes and onions from Bangladesh, saying that stronger regional trade would bring positive outcomes for the people of the region, according to the press release from the Ministry of Commerce.